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Soybeans:

May soybeans gained 17.25 on very heavy volume of 431,175 contracts.Volume was the strongest since October 29, 2014 when 457,314 contracts were traded and May soybeans closed at 10.62 3/4. On February 24 total open interest declined by 2,694 contracts, which relative to volume is approximately 70% below average. The March contract accounted for loss of 25,834 of open interest, and there were sufficient open interest increases in the forward months to substantially reduce the open interest decline in the March contract.

As this report is being compiled on February 25, May soybeans are trading 10.75 cents lower¬†and have made a daily high of 10.24 1/2, which is below yesterday’s high of 10.32. Although May soybeans remain on a short-term buy signal, which was generated on February 20, the fundamentals for soybeans are clearly bearish, and we see this rally as temporary in nature. We have no recommendation.

Soybean meal:

May soybean meal gained $7.20 on heavy volume of 154,595 contracts. Volume was the strongest since November 12, 2014 when 184,629 contracts were traded and May soybean meal closed at 357.10. On February 24, total open interest declined by a massive 7,020 contracts, which relative to volume is approximately 75% above average meaning that market participants were liquidating in heavy numbers as prices advanced to a new high for the move (351.70). The March contract accounted for loss of 16,536 of open interest and there were insufficient open interest increases in the forward months to offset a good portion of the decline in the March contract. As this report is being compiled on February 25, May soybean meal is trading 7.30 lower on the day. On February 19, May soybean meal generated a short-term buy signal, but remains on the intermediate term sell signal.We have no recommendation.

Corn:

May corn lost 1.25 cents on very heavy volume of 535,603 contract. Volume with the heaviest since November 13, 2014 when 589,625 contracts were traded and May corn closed at 4.07 1/4. On February 24, total open interest declined by 10,773 contracts, which relative to volume is approximately 20% below average. The March contract lost 53,609 of open interest, and there were sufficient open interest increases in the forward months to bring the total open interest declined down below average. As this report is being compiled on February 25, May corn is trading 3.50 lower on the day. May corn remains on a short and intermediate term sell signal.

WTI crude oil:

April WTI crude oil lost 17 cents on very light volume of 546,031 contracts. Volume was the weakest since January 27 when 549,719 contracts were traded and April WTI closed at 47.95. On February 24, total open interest increased by 8,528 contracts, which relative to volume is approximately 35% below average. The March contract accounted for loss of 206 of open interest. As this report is being compiled after the release of the EIA petroleum report, April WTI is trading 91 cents higher despite a very large increase in stocks in the latest report. On February 13, April WTI generated a short-term buy signal, but remains on intermediate-term sell signal. Stand aside.

The Energy Information Administration announced that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 8.4 million barrels from the previous week. At 434.1 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years. Total motor gasoline inventories decreased by 3.1 million barrels last week, but are above the upper limit of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories decreased by 2.7 million barrels last week and are in the lower half of the average range for this time of year. Propane/propylene inventories fell 2.2 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories increased by 2.5 million barrels last week.

Brent crude oil:

April Brent crude oil lost 24 cents on volume of 718,794 contract. Total open interest increased by 2,450, which relative to volume is approximately 65% less than average. The April contract lost 7,075 open interest. As this report is being compiled on February 25, April Brent is trading $1.23 higher and is trading slightly below the highs of the day. On February 3, April Brent crude oil generated a short term buy signal, but remains on intermediate term sell signal. Stand aside.

Gold: On February 24, April gold generated an intermediate term sell signal after generating a short-term sell signal on February 9.

April gold lost $3.50 on volume of 127,547 contracts. Total open interest increased by 739 contracts, which relative to volume is approximately 65% below average. For the past two sessions, April gold has declined $7.60 and has increased by 5,245 contracts, which is bearish open interest action relative to the price decline. Additionally, the increases of open interest occurred at the low end of the recent trading range, which means that market participants are not hesitant about adding to short positions as prices make new lows. Stand aside.

Silver:

May silver lost 6.3 cents on heavy volume of 69,793 contract. Volume with the highest since February 20 when silver lost 10.8 cents on volume of 73,156 contracts and total open interest declined by 2,674. On February 24, total open interest increased by 533 contracts, which relative to volume is approximately 60% less than average. However, the March contract lost 9,271 of open interest, which makes the minor increase of open interest more impressive (bearish).As this report is being compiled on February 25, May silver is trading 24.7 cents higher and has made a daily high of 16.750, which is considerably above OIA’s key pivot point for February 25 of 16.421, which would trigger an intermediate term sell signal. The high of the day must be below the pivot point. Stand aside.

Cocoa:

May cocoa gained $16.00 on volume of 28,332 contracts. Total open interest increased by 3,304 contracts, which relative to volume is approximately 375% above average, meaning that new buyers were entering cocoa in large numbers and driving prices to a new high for the move (3029). As this report is being compiled after the close, May cocoa has closed sharply lower, down $40.00. The market remains overbought and is on a short and intermediate term buy signal. Stand aside.

Coffee:

May coffee gained 65 ticks on light volume of 18,166 contracts. Total open interest increased by a hefty 1,136 contracts, which relative to volume is approximately 150% above average meaning there was a battle between buyers and sellers and buyers were able to edge the market fractionally higher.The March contract accounted for loss of just 3 of open interest. As this report is being compiled on February 25, May coffee is trading sharply lower again, down 6.50 cents, or -4.37%. The March contract, which is being traded strictly by commercial interests and is not available to be traded by speculators has made a daily low of 1.4005.

We examined the continuation chart for February 2014, and it appears that coffee may find support at the 1.3000 level. The market rallied from the low of 1.1330 on January 28 to a high of 1.4370 on February 5, 2014. Coffee then pulled back to a low of 1.3205 and traded in a consolidation pattern for a couple of days before resuming its uptrend. The fundamentals for coffee  remain bullish longer-term, but the very weak Brazilian currency coupled with favorable amounts of rain have dampened enthusiasm for coffee at this juncture.

At some point, selling will exhaust itself and new demand will kick in, especially because coffee has become cheap, especially if transactions are made in U.S. dollars. Much damage has been done to the coffee chart, and there will be a period of repair before the market can begin its uptrend. May coffee remains on a short and intermediate term sell signal. Stand aside.